Vacancy rate stabilises at mid-2%

• Vacancy rate for Auckland remained at 2.4% between June and December 2024. Precinct-wise, vacancy rates stand at 2.3% (-40 bps) for Auckland City, at 2.8% for Manukau (unchanged since Q2 2024), at 1.3% for North Shore (+40 bps) and at 3.4% for North-West (+190 bps).
• In the medium- to long-term, the Auckland regional vacancy rate is expected to remain at or near 3%, highlighting ongoing demand and supply imbalances. A recent rise in sublease space will assist some occupiers in the short-term.

Several large-scale projects under construction across City and South precincts

• A 3.5-ha Neilson Street development in Onehunga is expected to be the largest industrial build for NZX-listed Argosy Property when completed later this year. It comprises 5,000 sqm and 11,500 sqm warehouses and is targeting a 6 Green Star Design and As-Built rating.
• In late-2024, Calder Stewart announced its partnership with Wesfarmers to deliver a new North Island distribution centre for NZ Safety Blackwoods in Drury South. Calder Stewart has also started construction on Briscoe Group’s site here in Drury.

Rent growth moderates

• Prime and secondary average net warehouse rents stand at NZD 193 and 158 per sqm, p.a., respectively. Prime and secondary average net combined rents stand at NZD 215 and 175 per sqm, p.a., respectively.
• Significant transactions for Q1 2025 include the sales of 6 Hautu Drive, Wiri, a 5,748 sqm property for NZD 17.35 million, and 21 Bill Stevenson Drive, a 4,280 sqm property for NZD 14.80 million.

Outlook: Better conditions will result in tighter market fundamentals

• The industrial sector continues to be a strong performer, with opportunities arising from both sublease and vacant spaces. Activity levels suggest a moderate uptick in demand, particularly from logistics and e-commerce operators.
• This trend is likely to accelerate as the economy recalibrates and interest rates stabilise, potentially leading to more robust rent growth. The market is already showing signs of this, with prime average net warehouse rents holding firm at NZD 193 per sqm, p.a.